Stacks (STX) price has gone parabolic this week as investors cheered its strong ecosystem growth and the performance of Bitcoin. It has risen for five straight days, reaching a high of $2.43, its highest level since May 5th. As a result, it has jumped by over 35% from its lowest swing last week.
Stacks ecosystem boom
There are three main reasons why the price of Stacks has jumped this week. First, this performance is primarily because of Bitcoin’s performance. BTC has jumped to over $71,000 and some analysts believe that the coin has more upside.
As reported on Wednesday, Mike Novogratz has come out with a $100k Bitcoin prediction for the year. In a separate statement, VanEck analysts noted that Ethereum could surge to over $20,000 in the longer term.
At the same time, the crypto fear and greed index has moved to the greed zone of 62, a positive thing for most altcoins. Also, the market has embraced a risk-on sentiment, which explains why US stocks surged, with Nvidia’s market cap soaring to over $3 trillion on Wednesday.
Second, the Stacks token soared because of its ecosystem growth. Data compiled by DeFi Llama shows that the network’s Total Value Locked (TVL) has soared to a record high of 137.63 million STXs. It has jumped sharply from the year-to-date low of less than 40 million STX.
The biggest players in the ecosystem are the likes of StackingDAO, ALEX, Zest, Bitflow, and Lisa. StackingDAO is a leading liquid staking network in the ecosystem that allows users to generate returns by just holding the STX token. ALEX and Bitflow are Decentralized Exchanges (DEX). The increase in TVL could continue to rise in the coming months.
Finally, from a macro perspective, the token rallied as hopes that the Federal Reserve would start cutting interest rates soon rose. The Bank of Canada (BoC) became the first G7 central bank to slash rates on Wednesday while the European Central Bank (ECB) is expected to do that today.
Some analysts believe that the Fed could be under pressure to respond with a rate cut. This view will depend on Friday’s nonfarm payroll (NFP) data and the upcoming Consumer Price Index (CPI) report. Cryptocurrencies and stocks do well when the Fed is slashing interest rates.
Stacks price forecast
The daily chart shows that the STX price has rebounded recently. This price action happened after the token formed a slanted triple-bottom pattern shown in blue. It has moved above the key resistance point at $2.28, its highest swing on May 21st.
The token has also jumped above the first resistance level of the Woodie pivot points and the 50-day moving average. Additionally, it is now approaching the 38.2% Fibonacci Retracement level.
Therefore, the Stacks (STX) price will likely continue rising as buyers target the second resistance at $2.78, which is about 15% above the current level.
